Availability The percentage of planned production time that equipment is actually running. One of the three components of OEE. Captures all stoppage time including breakdowns, changeovers, and adjustments.
→ See OEE
Bottleneck The process step or machine that limits the throughput of the entire production line. The bottleneck determines the maximum output rate — improving any other step without improving the bottleneck will not increase total throughput.
Continuous Improvement An ongoing effort to improve products, services, or processes. In manufacturing, typically implemented through frameworks like Lean, Six Sigma, or TPM. The key principle is that small, incremental improvements compound over time. DPMO Defects Per Million Opportunities — the standard unit for expressing defect rates in Six Sigma programs. World-class (6σ) performance is 3.4 DPMO.
→ See Defect Rate Hidden Factory The rework, repair, and re-inspection effort that operates within a manufacturing operation without producing additional output. When First Pass Yield is 90%, it means 10% of production effort is consumed by the hidden factory. This work consumes labour, machine time, and materials but adds nothing to actual output.
→ See First Pass Yield Ideal Cycle Time The theoretical minimum time to produce one unit, based on equipment design specifications. Used as the benchmark for the Performance component of OEE. Actual cycle time is almost always longer than ideal cycle time.
→ See Cycle Time KPI Key Performance Indicator — a strategic metric that is directly tied to business objectives, has a defined target, a reporting cadence, and clear accountability. All KPIs are metrics, but not all metrics are KPIs.
→ See KPIs vs Metrics
Lead Time The total elapsed time from when a customer order is placed to when it is delivered. Includes processing time, waiting time, transport, and any queuing. Much longer than cycle time, which measures only the production time per unit.
Lean Manufacturing A production methodology focused on eliminating waste (muda) while delivering value to the customer. Core principles include continuous improvement, respect for people, and pull-based production synchronised to takt time. OEE Overall Equipment Effectiveness — the single most widely used measure of manufacturing equipment productivity. Calculated as Availability × Performance × Quality. World-class OEE is 85%+.
→ See OEE
Pareto Analysis A technique based on the Pareto principle (80/20 rule) — the idea that roughly 80% of effects come from 20% of causes. In manufacturing, used to identify the small number of downtime causes, defect types, or failure modes that account for the majority of losses. Performance One of the three OEE components. Measures whether equipment ran at its ideal speed when it was running. Captures speed losses and minor stops that don't register as full downtime events.
→ See OEE Quality (OEE Component) One of the three OEE components. Measures the percentage of production that meets specifications on the first pass. Captures startup rejects and production defects. Does not credit reworked parts.
→ See OEE
Root Cause Analysis A systematic process for identifying the fundamental cause of a problem, rather than just addressing symptoms. Common techniques include 5 Whys, fishbone (Ishikawa) diagrams, and fault tree analysis. Part of Level 2 (Diagnostic) analytics. Six Big Losses The six categories of manufacturing loss captured by OEE: (1) Unplanned Stops, (2) Planned Stops — affecting Availability; (3) Minor Stops, (4) Reduced Speed — affecting Performance; (5) Startup Rejects, (6) Production Rejects — affecting Quality. Understanding which loss is largest guides improvement priorities.
→ See OEE
Six Sigma A disciplined, data-driven methodology for eliminating defects. The name refers to the statistical goal of fewer than 3.4 defects per million opportunities (6σ). Uses the DMAIC cycle: Define, Measure, Analyse, Improve, Control. SMED Single-Minute Exchange of Die — a methodology for reducing changeover time to under ten minutes. The core technique is separating changeover activities into internal (machine must be stopped) and external (can be done while still running), then converting internal activities to external ones wherever possible.
→ See Changeover Time
SPC Statistical Process Control — a method of quality control using statistical techniques to monitor and control a process. SPC uses control charts to detect when a process is drifting out of specification before defects occur. Part of Level 3 (Predictive) analytics.
TEEP Total Effective Equipment Performance — similar to OEE but includes all calendar time, not just planned production time. TEEP reveals how much of the total available time (24/7/365) is being used productively. Always lower than OEE.
TPM Total Productive Maintenance — a holistic approach to equipment maintenance that strives for perfect production: no breakdowns, no small stops, no defects, and no accidents. OEE is the primary metric used by TPM programs. World-Class OEE An OEE score of 85% or higher, typically composed of approximately 90% Availability × 95% Performance × 99% Quality. This is a widely cited benchmark but should be contextualised — some processes (batch, complex assembly) may never reach 85%, while others (high-volume continuous) should target higher.
→ See OEE